Homeland Security panel calls for tougher Medicare oversight

By Julian Pecquet - 07/15/10 10:48 AM ET

Sen. Tom Carper (D-Del.), chairman of the Homeland Security panel's federal financial management subcommittee, said Thursday that the government needs to act quickly to recover hundreds of millions of dollars in wasted Medicare payments.

Medicare's Recovery Audit Contractor program, Carper said, should quickly be expanded to Medicare Advantage, the Medicare prescription drug program and Medicaid, as called for in the healthcare reform law.

"The sooner the full program is up and running," Carper said in prepared remarks, "the sooner we can recover millions of dollars — probably billions of dollars — in additional overpayments and put them to more effective use."

The subcommittee is scheduled to hear testimony from government agencies and Recovery Audit Contractors (RAC). The RAC program was created as a demonstration program in 2003 and expanded nationwide in 2006; the program pays contractors to review Medicare claims for over- or underpayments.

The U.S. Government Accountability Office released a report in March that found that the RAC program could be improved by:

— development of a process and taking corrective action to address improper payment vulnerabilities identified by the RACs;

— better coordination between RACs and the Medicare claims administration contractors;

— establishment of methods to oversee RAC claim review accuracy and provider service.